The practice of companies reducing occupational pensions to take advantage of increases in social welfare is to be outlawed under the 1999 Social Welfare Bill.

The Minister, Mr Ahern, is to introduce the necessary amendments to the Bill when it receives its second reading in the Dail this week.

The move was welcomed yesterday by trade union representatives on the Pensions Board. SIPTU's national equality secretary Ms Rosheen Callendar said that comparatively few employers' engaged in this practice but the new Bill "will be a safeguard for employees concerned that any increase in their old age pension might be cancelled out by a reduction in their occupational one". She said it would also prevent more companies from being tempted to reduce their pension provisions for employees, in the belief that rising state pensions would provide them with a cushion or indirect subsidy to set against future liabilities.

The Irish Congress of Trade Unions representative, Mr Stephen McCarthy, described the practice of clawing back occupational pensions as "mean and petty from a pensions' point of view. Fortunately even the small minority of lousers who do this will no longer be able to do so."

Under the 1999 Bill, Part VIII of the 1990 Pensions Act will be amended so that the amount of occupational pension payable when an employee retires cannot be reduced as a result of increases in social welfare payments to pensioners.

The new legislation includes social welfare payments such as disablement pensions and death benefit, as well as the contributory old age pension.

Yesterday Mr Ahern said that he was concerned that occupational pensioners should receive the full benefit of social welfare increases.

"This Government is committed to improving the position of older people", he said.

He pointed out that the £11 a week increase in state pensions since he came to office were a third higher than those provided in the life of the Rainbow Coalition.

However, Mr Ahern has not addressed the issue of deductions made from the index-linked provisions of occupational pensions in his Bill.

These provide for increases based on the Consumer Price Index. In recent years state pensions have significantly exceeded the CPI, effectively eliminating any increase in the occupational schemes of some pensioners.

The Minister said that he had asked the Pensions Board to look at the matter further.